Reports of a suspected attack on two tankers off the coast of Iran, have added to the increased tensions in the region, raising concerns about the overall effects it could have worldwide.
Oil prices have already increased 4 percent today alone, amid concerns that the latest attack is a sign of increased instability in a region that is vital to the world’s oil supplies.
This, as a result of reports that two tankers were attacked in the Gulf of Oman, just a few miles from Iran’s coast. The location of the incident has raised concerns, given its proximity to the Strait of Hormuz—a vital waterway, which a third of the world’s sea-borne oil passes through every day.
Explosions were heard and one of the vessels was reportedly hit by a torpedo. The oil tankers were flagged by Panama and Marshall Islands, and they were en route to Singapore and Taiwan.
Following the reported attacks, Iran said its crews rescued 44 sailors, and the U.S. Navy said it rescued 21 crew members. This incident is not the first of its kind, and fears of increased instability in the region drove oil prices up 4 percent on Thursday.
Brent crude futures were up 3.65 percent, at more than $62 dollars a barrel. And U.S. West Texas Intermediate crude futures were up 3.5 percent, at nearly $53 dollars a barrel. As a result, the International Association of Independent Tanker Owners is now warning that because around 30 percent of the world’s sea-borne crude oil passes through the straits, the prospect of the waters becoming unsafe, could mean that the oil supply to the entire Western world is at risk.
Both of the oil tankers were reportedly carrying “Japan-related” cargo, on a day when Japan’s prime minister was on the country’s first official visit to Iran in more than 40 years. Following Thursday’s attacks, Iran’s foreign minister took to Twitter, where he said, “Suspicious doesn’t begin to describe what likely transpired this morning.” He argued the incident is evidence that Iran’s proposed regional dialogue forum is imperative.
It has also been one month since two Saudi Arabian oil tankers were among four ships that were damaged in the Persian Gulf. While Iran was quickly blamed by the U.S. and its allies in the region, it adamantly denied any involvement.
In response to the previous attacks, National Security Adviser John Bolton issued a warning to Iran, claiming that any attacks in the Persian Gulf will be met with a “very strong response” from the US.
Now it remains to be seen if anyone will take responsibility for this attack, what the fall-out will be, and if similar attacks will continue.
Within hours, reports were already saying that U.S. defense officials have claimed it is “highly likely Iran caused these attacks.” Iran has denied those claims, and it has pointed to the fact that the oil tankers were carrying “Japan-related” cargo at a time when Japan was conducting a historic meeting in Iran—so Iran has much more to lose than it does to gain from such an attack.